From Luxury Lodging to Starter Home: What $1 Million Can Buy Across Canada

Bang for your buck varies significantly, as the location, size, home finishes and condition of a $1 million home range widely by region

According to Royal LePage, Canada’s leading real estate services provider, extreme variances in recent home price appreciation across Canada have contributed to vast differences in the types of properties a prospective homeowner can expect to buy with a $1 million budget. While the once-exclusive $1 million home has become the norm in certain markets, in others, it can purchase anything from an ultra-luxury abode to an entry-level residence.

A $1 million home’s location, size, proximity to amenities and current condition ranked as the top four factors that influenced its pricing, not unlike homes in other price ranges. However, together, these four characteristics varied considerably from region to region, with Canada’s two hottest markets – Toronto and Vancouver – offering smaller, more dated two-storey “starter” homes when compared to larger, luxurious mansions elsewhere. While the average number of bedrooms and bathrooms typically found in a $1 million dollar home did not differ by region as materially as the aforementioned four factors, there were noticeable differences between certain regions. In January, 2017, a $1 million home in the City of Vancouver had an average of 2.6 bedrooms and 2.1 bathrooms, while on Canada’s other coast, a $1 million home in Halifax had an average of 3.1 bedrooms and 3.8 bathrooms. Looking to Central Canada, $1 million secured an average of 3.4 bedrooms and 2.5 bathrooms in the City of Toronto, while purchasing a $1 million home in Winnipeg delivered the biggest bang for your buck, with an average of 4.1 bedrooms and 4.0 bathrooms.

In fact, of the seven cities studied across Canada – including Vancouver, Calgary, Saskatoon, Winnipeg, Toronto, Montreal and Halifax – Winnipeg provided the most living space overall, with $1 million fetching on average, a 3,505 sq. ft. luxury home in a desirable neighbourhood. During the same period, $1 million in Saskatoon secured the largest lot size of all regions, with an average of 65,838 sq. ft. In contrast, Vancouver offered prospective homebuyers the least amount of home for $1 million, with an average of 1,229 sq. ft. on a 3,134 sq. ft. lot.

“There are striking differences in the options available for those who are looking to purchase a $1 million two-storey home in Canada,” said Dianne Usher, senior vice president of Johnston and Daniel, a division of Royal LePage. “From an older starter home in Vancouver to a waterfront property with all of the bells and whistles in Halifax, the amount of value and space that prospective buyers receive is largely dependent on the characteristics of the market in which they are located.”

When looking at inventory levels and sales activity, $1 million properties and transactions have been more prevalent in highly sought-after markets where greater demand has pushed home values higher. As a result, this has led these regions to experience a weakening in the overall value received for $1 million when compared to other areas across the nation that are less constrained by supply and demand.

While smaller, regional markets have continued to maintain their value over the last decade, 10 years ago prospective homeowners in Canada’s largest metropolitan areas were able to purchase fully-renovated homes in desirable neighbourhoods with considerably more space for $1 million.

“What used to be considered a luxury price point is now the status quo in Canada’s two hottest markets,” added Usher. “Once carrying significant purchasing power, $1 million is now either below or on par with the price of an average two-storey home in Toronto and Greater Vancouver. Now, instead of a fully upgraded three bedroom, three bathroom two-storey property in prestigious neighbourhoods like Rosedale or West Vancouver, you’re getting a much smaller two or three bedroom, two bathroom property in need of renovation in a less sought-after location.”

“However, significant value can still be found in the suburbs or city-centres like Saskatoon and Montreal, where homes are more affordable, landing you substantially more home with better features as a result.”

The profile of a $1 million buyer was also found to vary by region, with developers and first-time buyers dominating the $1 million two-storey property segment in Canada’s largest metropolitan areas, while wealthy young to middle-aged professional couples with children acted as the predominant purchasers elsewhere.

City Summaries and Trends

In January 2017, purchasers with $1 million in Greater Vancouver typically looked outside of the core for relative value to regions like Burnaby, Coquitlam and Richmond. The average $1 million home sold within this period in Greater Vancouver had 3.7 bedrooms, 3.2 bathrooms, 2,166 sq. ft. of living area and a lot size of 8,149 sq. ft., offering significantly more space and better features, when compared to properties in Vancouver proper.

“A prospective homeowner’s dollar goes significantly further in the regions surrounding the City of Vancouver,” said Adil Dinani, Realtor, Royal LePage West Real Estate Services. “Currently, most two-storey properties tend to sell for substantially more than $1 million in Vancouver, with the few properties available being significantly smaller or in dire need of renovation.”

Recently, many young move-up buyers have begun to dominate the $1 million two-storey market, as prices for condominiums and townhomes edged closer to the market segment, minimizing the amount of additional capital required to purchase this property type. Developers and speculators have also begun to hold off on purchasing two-storey property for $1 million as a result of bruised consumer confidence stemming from government intervention and weakened market characteristics.

Calgary

As a result of its recent economic downturn, purchasers looking for $1 million two-storey properties in Calgary currently realize approximately the same value they did 10 years ago. In January 2017, the average property selling for $1 million had 3.3 bedrooms, 2.8 bathrooms, 2,477 sq. ft. of living area and a lot size of 7,004 sq. ft.

The majority of buyers at this price point were 30 to 40-year olds who have come to the region to work within the oil industry. While the downturn in the energy sector has stifled sales activity and inventory at $1 million price point for the better part of two years, many buyers and sellers have recently begun to return to the market, causing homes to sell at a much faster pace.

“For most of 2016, Calgary’s million-dollar market segment continued to dwindle on the back of low oil prices, as many homeowners remained on the sidelines in hopes of better times ahead,” said John Hripko, Realtor, Royal LePage Benchmark. “However, just before the start of 2017, buyers finally realized that prices were unlikely to drop any further, leading many back into the market. As a result, we expect some upward pressure on prices and a shift in value over the horizon.”

Saskatoon

In Saskatoon, where homes are relatively affordable, $1 million two-storey properties tend to offer purchasers a large amount of space close to the core with a great view and high quality amenities. In January 2017, the average $1 million two-storey home had 3.2 bedrooms, 2.7 bathrooms, 2,829 sq. ft. of living area and a lot size of 65,838 sq. ft.

Million-dollar properties within the region were nearly unheard of a decade ago, as it was only when home prices virtually doubled in 2007 that inventory began to breach the seven-figure threshold. While inventory and sales activity at this price point still remain relatively low, Saskatchewan’s growing economy over the last decade has enticed many professionals, entrepreneurs and executives from the resource sector into the area, driving this niche market segment.

“Compared to many major Canadian cities, homes in the region’s $1 million price-point segment are quite affordable for affluent buyers who often earn incomes comparable to their counterparts elsewhere,” said Norm Fisher, broker/owner, Royal LePage Vidorra. “This small portion of the market signifies the pinnacle of luxury, with million-dollar budgets typically netting purchasers a state-of-the-art home in an affluent neighbourhood that either backs onto a river or golf course.”

Winnipeg

Boasting the most beds, baths and living area available for $1 million, a seven-figure budget goes a long way in Winnipeg when looking to the two-storey market segment. In January 2017, the average $1 million two-storey home had 4.1 bedrooms, 4.0 bathrooms, 3,505 sq. ft. of living area and a lot size of 13,453 sq. ft.

“Buyers with million-dollar budgets in Winnipeg are able to live like kings,” said Michael Froese, managing partner, Royal LePage Prime Real Estate. “Whether it’s an older colonial-type estate or modern mansion, the region’s extreme affordability relative to elsewhere provides purchasers with this budget access to a true luxury home.”

As with other parts of the Prairies, high-quality listings generally fall well below the million-dollar mark within Winnipeg, making the $1 million property a very rare sight. A decade ago, this market segment was extremely inactive, with roughly seven two-storey homes trading hands before 2007.

Greater Toronto Area

Across the Greater Toronto Area, prospective purchasers are still very much able to find relative value for $1 million, especially outside of the downtown core in regions like Ajax, Pickering, Milton, Mississauga and Brampton. In January 2017, the average $1 million two-storey home had 3.8 bedrooms, 2.9 bathrooms, 2,363 sq. ft. of living area and a lot size of 8,168 sq. ft.

Unlike Vancouver, homebuyers in the City of Toronto are still able to find some inventory around the $1 million mark, with the region offering a number of two-storey starter homes in up-and-coming neighbourhoods to prospective purchasers. This, however, is in stark contrast to what buyers could have received ten years ago, where home searches in the $1 million price range often produced larger, fully-upgraded homes in prominent areas like Rosedale, Leaside and Lawrence Park.

“Current market conditions have made it increasingly difficult to find value for $1-million in central Toronto,” said Cailey Heaps Estrin, broker, Royal LePage Real Estate Services Heaps Estrin Team. “Buyers will always receive more value the further they venture outside of Toronto’s core. However, the high-priced competitive environment that we have grown accustomed to in central Toronto is now expanding into neighbouring communities, leading buyers to look even further for relative value, while decreasing the overall home purchasing power of $1-million across the GTA.”

Greater Montreal Area

Despite witnessing a healthy amount of price growth within the last decade, the Greater Montreal Area has still managed to hold its position as one the most affordable major city centres in Canada, offering purchasers with a $1 million budget a substantial amount of home for their money. In January 2017, the average $1 million two-storey home within the region had 4.1 bedrooms, 2.8 bathrooms, 2,758 sq. ft. of living area and a lot size of 13,040 sq. ft.

Since 2007, moderate inventory shortages have placed an upward pressure on prices within the region, pushing many high-quality listings around the million-dollar mark. With demand remaining fairly constant, current market conditions have created a slight seller’s market, where properly listed million-dollar properties are quickly sold.

“Purchasers with $1 million budgets in the Greater Montreal Area have a great deal of buying power,” said Marie-Yvonne Paint, real estate professional, Royal LePage Heritage. “Unlike other major metropolitan areas, properties in Montreal and the Greater Montreal Area are far more reasonably priced and offer significantly more space than what you’d typically be accustomed to in a world-class region. Of course, there is still a good amount of competition when trying to purchase this type of property in the region, as well-priced homes in this price range will typically attract many buyers.”

Halifax

People armed with a million dollars in search of a waterfront mansion need not look any further than Halifax. With enough million-dollar inventory to satisfy demand, prospective buyers within the region are able to purchase a number of unique types of properties reflective of their tastes and desired lifestyle. In January 2017, the average $1 million two-storey home within the region had 3.1 bedrooms, 3.8 bathrooms, 3,316 sq. ft. of living area and a lot size of 43,521 sq. ft.

While homes tend to be much larger on the fringes of the city and offer prospective homeowners direct access to the water, buyers with seven-figure budgets can also tap into the heart of downtown to find stunning heritage homes. As with the rest of Atlantic Canada, properties in Halifax have maintained their affordability relative to other regions across the nation, landing purchasers just as much, if not more, property than what was previously available a decade ago.

“The value of a million-dollar property in Halifax continues to grow, both when compared to other cities across Canada and when compared to 10 years ago,” said Sandra Pike, team lead, Royal LePage Atlantic. “Recently, the region’s urban sprawl has enticed developers to expand into untapped regions of Halifax, giving prospective purchasers the option of buying brand new, fully upgraded homes with a substantial amount of space for $1 million.”

Methodology

The tables found within this report represent averaged characteristics for two-storey properties that sold between $950,000 and $1,050,000 in 2007, 2016 and January 2017. Highlighted property listings were collected based on a uniform set of criteria[4], where listings in each region required a standard two-storey that is selling or has been sold in the last two months within 10 per cent of $1 million. To gain additional insight into regional market dynamics and property characteristics, interviews were conducted with Royal LePage real estate professionals in the featured cities.

About Royal LePage

Serving Canadians since 1913, Royal LePage is the country’s leading provider of services to real estate brokerages, with a network of over 17,000 real estate professionals in more than 600 locations nationwide. Royal LePage is the only Canadian real estate company to have its own charitable foundation, the Royal LePage Shelter Foundation, dedicated to supporting women’s and children’s shelters and educational programs aimed at ending domestic violence. Royal LePage is a Brookfield Real Estate Services Inc. company, a TSX-listed corporation trading under the symbol TSX:BRE.